The Topix added 0.5 percent to 1,243.97 at the close in
Tokyo after falling as much as 0.8 percent. The measure added
0.8 percent this week. The Nikkei 225 Stock Average increased
0.8 percent to 15,097.84. The Bank of Japan announced today it
is maintaining record stimulus. The yen slid 0.4 percent to
102.06 per dollar.

“There was a selloff after the yen strengthened on
overseas news, but that didn’t last because general conditions
have improved for Japanese shares,” said Toshiyuki Kanayama,
Tokyo-based senior market analyst at Monex Inc. “The market
will remain resilient unless the Iraqi situation gets out of
control.”

Islamists Advance

The strife in Iraq, three years after U.S. troops withdrew,
has raised the prospect of a return to sectarian civil war in
OPEC’s second-biggest oil producer. Security forces sought to
check the rapid advance of Islamist militants who had seized
major cities, as Prime Minister Nouri al-Maliki responded to the
greatest threat to his government since taking power.

West Texas Intermediate crude headed for the biggest weekly
advance this year as violence in Iraq threatened supplies from
OPEC’s second-largest oil producer.

Advantest added 3.6 percent to 1,253 yen after the Nikkei
newspaper reported it will probably raise its operating profit
margin to 10 percent from 7 percent for the year ending March
2015 on rising orders for chip-testing equipment.

Dowa Holdings Co. advanced 1.9 percent to 959 yen after
Credit Suisse Group AG raised its rating on the metals refiner
to neutral from underperform.

Airlines Decline

Futures on the Standard & Poor’s 500 Index gained 0.1
percent today after the equity measure declined 0.7 percent
yesterday. U.S. retail sales rose 0.3 percent in May, missing
estimates for a 0.6 percent gain in a Bloomberg survey, after a
three-month surge in shopping. The gain followed a revised 0.5
percent advance in April that was larger than previously
estimated, Commerce Department figures showed.

Even after a 8.2 percent rebound from its May 21 low, the
Topix is still the worst performer this year among 24 developed
markets tracked by Bloomberg. The measure capped a world-beating
rally last year as the BOJ pressed ahead with record monetary
easing.

BOJ Policy

The central bank today kept intact its policy of expanding
the monetary base at a pace of 60 trillion yen to 70 trillion
yen ($686 billion) per year. A rebound in consumer sentiment
and signs of strength in business investment indicate the
world’s third-biggest economy is weathering a higher sales tax.

Shares fell earlier. The 25-day Toraku Index, which
compares the numbers of advancing and declining stocks on the
Topix, stayed above 120 the past two days, a level that signals
to some investors that shares have climbed too far, too fast.

“The market continues to take a breather amid technical
signs of overheating,” said Kenichi Kubo, a senior fund manager
at Tokio Marine Asset Management Co. “There’s no reason for the
BOJ to add to stimulus as the impact of the sales tax increase
is fading.”

The Topix traded at 1.2 times book value today, compared
with 2.7 for the S&P 500 and 1.9 for the Stoxx Europe 600 Index
yesterday.

(An earlier version of this story was corrected to show
that Honda gets almost half its revenue from North America, not
overseas, and to remove the second reference to the carmaker.)